Walker Clark
Worldview Archives
“Eating” Without “Killing” Each Other: A Performance-Driven Lockstep Model for Lawyer Compensation in Law Firms
In a previous posting in this blog, we pointed out how an “eat what you kill” system of partner compensation can introduce toxic elements into a law firm, which frequently counteract any motivating effect on lawyer performance.
This short article outlines the features of an alternative to "eat what you kill" compensation in law firms. It works well in any size law firm, but is especially suited to small and midsize firms.
“Salary Plus” Compensation Structures to Promote Better Partner Performance in Law Firms
In a previous posting in this blog, we pointed out how an "eat what you kill" system of partner compensation can introduce toxic elements into a law firm, which frequently counteract any motivating effect on lawyer performance.
This short article outlines the features of an alternative to "eat what you kill" compensation in law firms. It can work well in any size law firm, but is especially suited to small and midsize firms.
Is “eat what you kill” killing your law firm?
An "eat what you kill" system of partner compensation does have some good points for some law firms.
For most law firms, however, "eat what you kill" can kill the partnership.
This is the second most frequently read post in the Worldview Archives, with more than 22,000 views since it was first published in 2018.
Are you thinking about starting your own law firm?
In the past two years, we have observed a new trend in some legal markets. For a variety of reasons, senior associates and non-equity partners are leaving their law firms to start their own.
A common factor in these departures, however, is a conclusion that there no longer is a persuasive business case to remain in the firm, and that, notwithstanding the risks, the opportunities are better in one's own firm.
Here are some things to think about.
Every law firm — without exception — needs a Chief Innovation Officer.
No matter how large, how famous, or how successful your law firm has been in the past...
...if you want to increase the chances of your law firm still being in business ten years from now, you must have a Chief Innovation Officer.
Sorry, there are no exceptions.
Partner Compensation: a Small Law Firm’s Biggest Risk?
Smaller law firms have much less tolerance for poor management. The loss of just a few clients or even one partner can have a disproportionately larger impact than in a larger firm.
One of the biggest risks to a small law firm — and one that is frequently overlooked or, in some partnerships, deliberately ignored — is its partner compensation system.
“We have to get our house in order...”
Although rapidly-changing, intensely-competitive market dynamics will continue to shape the strategic context in which most law firms will operate in 2018, the new year is also proving to be internally challenging, especially for small and midsize firms.
We have noticed, beginning in the third quarter of 2017, a sharp increase in requests for advice and service with respect to three issues: partner compensation, governance, and succession planning.
Are you ready for 1-to-400 leverage?
For most firms, a 1-to-4 leverage ratio has long been considered to indicate a desirable level of profitability, while also being manageable.
What will happen when artificial intelligence systems give law firms the potential to generate leverage of 1-to-400?
Understanding Paradigms
Two of the biggest challenges for the Walker Clark "futures practice" are to break down the paradigms that prevent our clients from seeing the future — and sometimes even today — clearly, and to stimulate genuinely innovative responses.
Why Small and Midsize Law Firms are Especially Vulnerable to Mental Health Issues
What would you do if you suspected that one of your colleagues was chronically depressed or was abusing alcohol or drugs?
Unfortunately, most small and midsize law firms can't answer this question.
Some don't even want to think about it.
Merger, Best Friends, or Something Else?
Many small and midsize law firms find themselves in some difficult — and for most of them, unprecedented — strategic predicaments.
They also are confronted with a wide range of possibilities such as, mergers, Vereins, general and specialized networks, and "best friends" relationships.
How can each firm make the decision that is best for them?
Setting Goals That Are Worth the Effort
Success starts when you have a goal?
Not necessarily.
Success is likely only when firms make the choices that are right for them.
Buying Time as a Wise Investment
Lawyers tend to greatly value efficiency. They tell us that control of their time, above all else, is an important factor in their personal and professional success.
Yet many law firm decision makers get stuck in a downward spiral of procrastination, unwilling to make a financial investment in protecting their time and even their sense of well-being.
Leadership in Times of Change
Law firm leaders tell us “We now have to accept change as the status quo."
And this means making judgment calls when there is insufficient time to find perfect solutions, or even to get all of the partners to agree.
The Value of Pessimism
Pessimism can be a valuable tool for getting things done.
The next time you say to a colleague, “Stop being so negative!” it might be helpful to make sure the benefit of their pessimistic thinking has been fully appreciated and used.
If it has, the better question is then, "How can we bring some balance to this discussion by using both pessimistic and optimistic thinking skills and behaviors?"
Watching How the Numbers Move
Most law firm leaders and managers watch their numbers very closely, but they often fail to notice how those numbers move.
Understanding variation in performance — how the numbers move — can provide profound insights into improving profitability.
Don’t let the big guys scare you.
From all the attention that "Big Law" is getting in the legal press and at legal conferences, one might erroneously assume that a relatively small number of large firms are destined to rule the legal world, and that smaller firms are irrelevant to the future of the legal profession.
Don't believe it.
Your Law Firm’s (Secret) Autobiography
Almost every law firm has some type of "about us" page on its website.
Have you ever considered what an honest "autobiography" of your firm would say?
Of course, it wouldn't be for publication, but it could be more important than what you publish to the world.
Survival Tools for Small and Midsize Law Firms
Law firms — indeed, most professional services firms — will be confronted by some formidable challenges between now and the year 2030. Consolidation of the legal market, the emerging dominance of large service providers with national and global capabilities, a continued profitability crunch, and increased competition for professional talent are probably the most obvious threats to continued success.
Independent small and midsize firms are the most vulnerable.
New Paradigms and Old Lessons for Cyberlawyers
Technology has been a fundamental component of the practice of law for a quarter-century; but most law firms have failed to understand how it is fundamentally changing – indeed, already has fundamentally changed – the practice of law.
Law firms must continue to evolve. Not all will be able to do so.
